Insights from Finfluencer PR Sundar on Market-Linked Debentures
PR Sundar, a financial influencer, explains market-linked debentures using an example. Let's say a company offers a market-linked debenture. They promise that if you invest Rs 100, after two years, they'll give you back Rs 114, which seems like a 14% profit. But it's important to understand this 14% isn't yearly; it's over two years. When you calculate the real annual return, it's less than 6%.
The company also says that 14% is the minimum you'll get. If the stock market does well, your profit could be even higher, like 20% or 30%. But if the market goes down, you still get at least 14% for two years. So, there's no risk of losing your money, and you might make more if the market does well.
To explain how the company does this, PR Sundar Finfluencer simplifies it: When you give Rs 100, they put Rs 95 in safe investments that usually make around 8% to 9% profit. After two years, this Rs 95 grows to about Rs 114, which they give back to you, ensuring at least Rs 114.
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